Exhibit 10.40
THIRD AMENDMENT TO LICENSE
AGREEMENT
This Third Amendment
(“Amendment”) to the License Agreement by and among
Roger Harris, Mark Dunnett and Kenny Johansson (collectively, the
“LICENSOR”) and Natural Alternatives International,
Inc., a Delaware corporation (“LICENSEE”), effective as
of April 28, 1997, as amended by that certain Amendment to
License Agreement dated March 17, 2001, and as further amended
by that certain Second Amendment to License Agreement dated
March 26, 2007 (collectively, the “Agreement”), is
made and entered into effective as of March 3, 2009
(“Effective Date”). Unless otherwise defined herein,
capitalized terms shall have the meanings given them in the
Agreement.
1. Section 4.3 is hereby
amended in its entirety to read as follows:
“4.3 Sublicensee
Royalties . LICENSOR acknowledges and agrees that LICENSEE
may:
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4.3.1
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Enter into
certain manufacturing or similar agreements with one or more third
parties pursuant to which LICENSEE agrees to grant a sublicense of
the rights granted to LICENSEE under this Agreement to such third
party in accordance with Section 2.2 of this Agreement in
exchange for the right of LICENSEE to manufacture and/or package
any Licensed Products developed by such third party pursuant to
such sublicense. In such event, LICENSEE agrees to pay LICENSOR a
royalty at the rates set forth in Section 4.2; provided,
however , that for such purpose “Net Receipts”
shall mean the gross invoice amount billed by LICENSEE to such
third party and received by LICENSEE for such manufacturing and/or
packaging services less shipping and storage costs, the cost of any
required governmental authorizations and outside laboratory
testing, research costs and returns, discounts, allowances and
rebates.
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4.3.2
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Enter into
agreements with one or more third party suppliers or distributors
of raw materials used in Licensed Products pursuant to which
LICENSEE agrees to grant a sublicense of the rights granted to
LICENSEE under this Agreement to such third party’s customers
in accordance with Section 2.2 of this Agreement in
consideration for the payment of certain sublicense fees to
LICENSEE by such third party supplier or distributor. In
such
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